TOLEDO, Ohio (AP) — Federal regulators have proposed a $40 million fine against the builder of a multistate natural gas pipeline, the second hefty penalty sought against the company within the past year.

The Federal Energy Regulatory Commission accused the company of repeatedly using diesel fuel and other toxic substances while drilling under a river in Ohio four years ago.

The proposed fine stems from an accidental spill of 2 million gallons of drilling mud, some of which seeped into a protected wetland during construction.

It comes after the commission last March proposed a $20 million fine against the company over the destruction of a historic farmhouse that stood in the pipeline’s path.

Dallas-based Energy Transfer Partners denied having involvement in using the diesel fuel for drilling.

The company and its subsidiary Rover Pipeline LLC built the twin pipelines to carry natural gas from Appalachian shale fields to Canada and states in the Midwest and the South. The 700-mile pipeline crosses much of Ohio and stretches from Michigan to West Virginia.

The $4.3 billion project was completed in 2018 following court battles with landowners and state and federal regulators who delayed the work after drilling mud spills.

The federal commission in December told Energy Transfer Partners and Rover Pipeline to explain why it should not pay a $40 million civil penalty for alleged violations related to a spill near the Tuscarawas River in northern Ohio’s Stark County.

Regulators said Rover Pipeline intentionally and routinely used diesel fuel and other toxic substances and unapproved additives in drilling mud while it was installing the pipeline under the river.

The violations were the result of a corporate culture that emphasized finishing the work quickly over complying with regulations, the commission said.

Energy Transfer Partners said in a statement that the commission has no evidence that anyone at the company knew diesel fuel was being used and that it did not tell anyone to do so. It said a rogue employee from an independent subcontractor said under oath that he made the decision on his own and then tried to hide it.

The company has cleaned up and restored the area and will seek to recover any fines from the contractor in charge of the drilling, said spokesperson Alexis Daniels.

Energy Transfer Partners has until the middle of March to file a formal response with the commission.

Last March, the commission proposed a $20 million fine against the company, accusing it of not being truthful about its intention to demolish a 170-year-old farmhouse it had purchased. That matter is still pending.

By John Seewer

Associated Press